2009 outlook positive for Pike River

By MARTA STEEMAN - The Press | Friday, 29 August 2008

Pike River Coal Limited has reported a loss of $1.14 million reflecting the West Coast underground mine is still in its development stage.

The company raised $182 million in the last year to fund the developement.

Chief executive Gordon Ward said first premium coking coal production from the underground mine 46 kilometres north of Greymouth in the Paparoa Range was due by the end of September. That is two months behind the earlier target of July.

For the June 2009 year Pike Coal still expected to produce 200,000 tonnes.

Ward said the most exacting task was completing the 2.3 km tunnel to the Brunner coal seam. It was nearing completion but the final section was revealing ``variable rock conditions''.

The $1.14m loss in the year to June 2008 compares with the $881,000 in the previous year.

The year's result had a number of one-off items; including recruitment of management and a skilled mine workforce, and transition to new coal transport arrangements.

The loss for the year was less than market expectations, but not that relevant because the first coal production would take place this financial year.

Recruitment has gone well with more than 80 staff now employed.

Ward said the outlook for the year to June 2009 was positive with forward orders in place and prices for premium hard coking coal tripling to US$300 a tonne compared to a year ago.

He said hard coking coal demand was forecast to remain high over the next few years.

Pike River became an NZX Top 50 in July and its market capitalisation was approximately $500 million.

The company had a strong balance sheet and the focus remained on delivering the second largest hard coking coal mine in New Zealand.